The amount next year is always the amount this year plus 6% times the amount this year.
So lets look at what happens the first couple of years. Since t is the number of years after 1997, in 1997, t = 0, in 1998, t = 1, and so on.
t Previous Amount Added Total ------------------------------------------------------------------------------------------------------------------- 0 0 43.2 0 + 43.2 1 43.2 43.2(0.06) 43.2 + 43.2(0.06) = 43.2(1.06) 2 43.2(1.06) [43.2(1.06)](0.06) 43.2(1.06) + 43.2(1.06)(0.06) = 43.2(1.06)(1.06) = 43.2(1.06)²
I'll leave it to you to verify that for
So, if we use the facts that
t Total
-----------------------------
0 43.2(1.06)^0
1 43.2(1.06)^1
2 43.2(1.06)^2
3 43.2(1.06)^3
.
.
.
n 43.2(1.06)^n
John
My calculator said it, I believe it, that settles it
